Comfortably billeted a long way back from the front line, George Osborne insists there is no alternative to his strategy. Photograph: Luke Macgregor/Reuters

The British economy will end 2012 pretty much where it started. There has been no growth and no real progress in reducing the government's budget deficit. In military terms, it has been like the western front in 1916: the troops have edged forward a bit then back a bit, but after a year of attrition the front line has not moved.

George Osborne will not have been greatly cheered by the latest data from the Office for National Statistics, although there were one or two pieces of modestly good news. Growth in the third quarter was revised down by 0.1 percentage points to 0.9%, while the £17.5bn budget deficit for November was well above the figure in the same month of 2011.

Gross domestic product in the third quarter was boosted by two special factors – the bounce back from the output lost as a result of June's extra bank holiday and the additional spending associated with the Olympics. The underlying picture was of an economy moving sideways, which it was did in the second quarter and looks set to do in the fourth quarter as well. Hard data for the last three months of 2012 is still pretty thin on the ground, but the Bank of England expects the reaction to the Olympics to result in a small fall in national output.

For the first eight months of the 2012-13 financial year, public sector net borrowing stood at just under £93bn, a 10% increase on the same period of 2011-12 once the transfer of assets from the Royal Mail pension fund is stripped out. Income tax and corporation tax receipts are down, which is only to be expected if the economy is going nowhere.

According to the chancellor, by the end of the year borrowing for 2012-13 will be down on 2011-12, but that is only because he is counting on the proceeds of the 4G spectrum to disguise an underlying weakening of the public finances. A successful spectrum auction in the Netherlands this week has raised hope at the Treasury that the UK sale will raise even more than the £3.5bn forecast in the autumn statement. Osborne had better hope so: on Friday's evidence he is going to need every penny.

The two pieces of slightly more cheery news were that household real disposable income rose in the third quarter and that there was a narrowing of Britain's balance of payments deficit. Households banked some of their rising income, resulting in an increase in the savings ratio and this, together with the boost from investment income, hinted at a gentle rebalancing of the economy.

But the big picture remains unchanged. The air is thick with talk of a triple-dip recession and a possible credit downgrade. Osborne, comfortably billeted a long way back from the front line, insists there is no alternative to his strategy and that it will work given time. Another year of trench warfare looms.